January’s Record-High Gas Prices

Gas prices are usually low in January, but not this year. Gas prices are record-setting high.

Currently the US average for a gallon of self-serve regular gas is $3.44. Today’s retail price is two cents more than yesterday, six cents more than last week, 17 cents more than one month ago, and 35 cents more than one year ago, according to the AAA Fuel Gauge Report.

California’s average price for a gallon of regular gasoline climbed 2.7 cents to $3.741 over the last week, according to the Energy Department’s weekly survey of service stations. That was 37.7 cents higher than the previous record price for the week, set a year earlier, and 76.6 cents a gallon higher than the same week in 2010, the LA Times Reported.

The steady increases in gas prices are largely due to planned and unplanned refinery shutdowns, both in the U.S. and Europe, as refiners cut production in the face of limited demand for their product. AAA said prices would be worse if it weren’t for weak demand.

$4 Gas Prices by Spring?

Tom Kloza, chief oil analyst at the Oil Price Information Service, said he thinks the move to $3.40 gallon in retail gasoline prices is “a bit ahead of itself, but I suspect that we’ll see $3.50-$4 a gallon in March and the top comes in April between $3.75-$4.25 a gallon.”

Even though gas prices are rising, oil prices have been steadily hovering around $100 per barrel. While traders remain focused on euro zone debt concerns and dismal demand numbers, placing downward pressure on oil prices, as well as geopolitical tension with Iran and signs of economic recovery in the U.S., placing upward pressure on prices, the net impact has been the price of crude holding steady in recent weeks.